Activision, EA settle claims in ‘Call of Duty’ case

Vidgame creators still pursuing royalty claims against Activision

Activision Blizzard said Wednesday it has settled its suit against Electronic Arts, which accused EA of luring away two creators who oversaw the runaway videogame hit “Call of Duty: Modern Warfare 2.” The developers of the game will continue their claim for royalties and damages that could reach $1 billion or more.

A trial is scheduled to start on May 29 in the developers’ case against Activision, after Los Angeles Superior Court Judge Elihu Berle refused a request by Activision’s attorney to delay the proceedings by 30 days.

Jason West and Vincent Zampella sued Activision in March 2010, claiming that they were fired from the company shortly after the release of “Modern Warfare 2″ and were denied at least $36 million in bonuses. Activision countersued, contending that they were terminated for insubordination.

The company claimed that West and Zampella undermined the company by plotting to poach employees from Activision’s Infinity Ward studio, which they led. The two were accused of delaying the development of sequels and secretly arranging a meeting with arch-competitor EA.

Activision later added a $400 million contract interference claim against EA to its suit.

The companies did not disclose settlement terms, other than to say that they “have agreed to put this matter behind them.”

West and Zampella formed their own studio, Respawn Entertainment, and landed a publishing deal with EA.

Their attorney, Bobby Schwartz, characterized the settlement as a dismissal by Activision of EA’s part in the case. “We are delighted,” he said in a statement. “This make our case against Activision even clearer. Activision dragged EA into the case hoping to distract from Activision’s wretched conduct toward West and Zampella.”

Although the two developers had originally listed $36 million in bonuses in their damage claims, in a regulatory filing last week, Activision said that West and Zampella’s damages claims had “significantly increased” during discovery to more than $1 billion. A spokeswoman for the two plaintiffs said that the amount was calculated after meetings between their lawyers and Activision’s damage expert.

Some 40 other former employees of Activision’s Infinity Ward studio also filed suit for unpaid bonuses and other compensation, with damage claims that have reached $350 million, according to Activision. The company reportedly will pay $42 million to those employees, but the spokeswoman said that their suit will continue because they “are suing for much more than this payment.”

Bruce Isaacs, attorney for the employees, said that the case “was never about EA” but Activision’s “failure to honor its contract and its failure to pay the talented people who made them billions of dollars.”

Activision had sought a delay in the case after it hired Beth Wilkinson, a well known Washington-based litigator who has been enlisted by the Federal Trade Commission to lead its investigation into the business practices of Google. Although their request for a delay was denied, a company spokeswoman said, “We accept the court’s decision and look forward to trying the case in the courtroom.”